Oil prices soar to another new high

Oil prices...well, you get the picture.  After soaring as high as $129.60 then managed to pull back slightly to settle the day up $2.02 at another new record close of $129.07.  This came as the expiration for the June contract was reaching its climax.  Tomorrow, the July contract takes over as the front month contract in the futures pit.

 

Gasoline prices rose once again at the pumps now up to a nationwide average of $3.80.  Gasoline futures also rose on the higher oil prices, up 5.78 cents to settle at $3.3044 a gallon.

 

Diesel fuel also rose to another record at the pumps with truckers now paying $4.54 on average nationwide.  Heating oil futures climbed almost 10 cents to settle at $3.775 a gallon after earlier rising to a record high of $3.792.

 

Natural gas followed the oil pits trading up 41.1 cents to settle at $11.365 per 1,000 cubic feet.

 

Today marked the 10th time in the last 12 trading session crude oil prices have hit a trading or closing record, in not both.

 

"I keep making projections, and they keep turning out to be too low," said Darin Newsom, senior analyst at market analysis provider DTN.  "We're already pushing up against $130.  If we clear that, there's no reason to believe crude oil can't get to $140."

 

"It's a runaway market at this point," said Fred Rozell, retain pricing director at the Oil Price Information Service.  "I think it's just money chasing money."

 

"Diesel and gas are just taking a ride.  This is really a crude market this year, and crude is really the driving force that's pushing prices higher," Rozell said.

 

On the technical side of the new record, the relative strength climbed once again today now standing at 76% for the last day of trading on the June contract.  The 20-day moving average jumped to $121.26 and the 50-day moving average also climbed higher settling at $112.99.  The volume was very thin with 44058 contracts being traded and 35,631 contracts being closed out, for profit or loss after the market closed this afternoon.  Overall the volume shot up to 607,516 contracts covering all available months for trading.  The open interest inched for by just shy of 2,000 contracts to settle at 5,517,557 contracts.

 

Looking at the July contracts stats show, the price settled at $128.98 with relative strength at 76% and open interest of 368,266.  The open interest for the July contract has been growing each day for the past two weeks, not surprisingly.

 

Once again there should be pullback coming in prices.  This is a major speculative bubble that won't be pretty when it bursts.  Some in the petroleum industry are now starting to suggest limits should be put on futures trading to control how much oil can move in one day to help control prices.